Stable inflation will boost business, government planning – Economist

Economist Professor Peter Quartey has welcomed Ghana’s sharp decline in inflation, describing it as a positive development for both businesses and government planning, provided the rate remains stable.

Speaking in an interview on Joy FM’s Midday News on Thursday, Prof. Quartey explained that while some level of inflation is necessary for economic activity, the key issue is stability rather than excessively high or unpredictable increases.

His comments follow the release of the latest Consumer Price Index (CPI) data, which showed that Ghana’s inflation rate fell significantly to 3.8 percent in January 2026. The figure represents the 13th consecutive decline and the lowest inflation rate recorded since the rebasing of prices in 2021.

Responding to a question on how the drop in inflation would affect businesses and government, Prof. Quartey noted that moderate inflation can support profitability and production.

“For businesses, planning is important. I must say that some rate of inflation is good, because when there is inflation, businesses are able to produce more and there is profitability,” he said.

However, he cautioned that high inflation remains harmful, as it creates uncertainty and disrupts economic decision-making.

“What matters is for inflation to be stable. That enables businesses to plan. Otherwise, it is quite difficult,” he added.

Prof. Quartey explained that unstable inflation makes it challenging for businesses to restock and manage pricing, affecting both production and consumer demand.

He also indicated that lower and stable inflation provides government with a better environment for budgeting and long-term economic planning.

“This is quite good for government as well in terms of planning purposes,” he stated.

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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.